Ras proteins have been identified to be associated with the development of a great diversity of human tumors. Biochemically ras proteins are believed to play important roles in signal transduction. Several reports have suggested that ras-like G-proteins modulate the activity of phosphoinositide-specific phospholipase C (PLC)-dependent signalling pathways. Our data indicate that PLC activity is necessary for ras-mediated induction of DNA synthesis in NIH 3T3 cells and that ras may function as a G-protein-like molecule in inositol phospholipid signal transduction. Raf protein possesses serine/threonine kinase activity and is localized in the cytoplasm. In order to investigate the functional relationship between raf and ras/PLC in signalling pathways, we have expressed raf proteins in E. coli. Microinjection studies show that truncated raf protein itself is sufficient to induce transforming activities, although the full-length raf protein is not active by itself. This result clearly demonstrates that the raf gene functions directly through its protein product. The regulation of raf protein transforming activities is currently under investigation.